DOW opens down sharply, President reconsiders tapping TARP funds
We've been watching cable news all morning, and it was revealed about 20 minutes before the Dow opened today that the White House was reconsidering its stance against tapping the Troubled Asset Relief Fund for troubled U.S. automakers. While we haven't heard anything official from the administration yet, pundits say it does have the power to redistribute some of the $700 billion earmarked for financial institutions to aid automakers. Before the Senate shot down an Auto Rescue/Bailout Bill last night, the White House had refused to consider tapping TARP to save General Motors and Chrysler from imminent bankruptcy. Now it seems all three automakers could file for Chapter 11 before Bush leaves office in January unless the administration acts quickly.
UPDATE: Of the $350 billion available in the first round of TARP fund distribution, $335 billion has already been handed out to financial institutions. That conveniently leaves about $15 billion, which is almost exactly the amount General Motors and Chrysler require to stave off immediate bankruptcy. Still no official word from the White House, other than that it's reconsidering the use of TARP money to aid automakers after the Senate's failure to pass a rescue/bailout bill last night.
[Source: AOL Money and Finance, MSNBC]
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